The gender pay gap does not exist

Harriet Harman claims that women earn on average 22.6% less per hour than men and takes it for granted that this difference is the result of discrimination against women by men. And yet the Government's own figures support no such conclusion.

(Copyright: David Rose)

Three official surveys are used by the Office for National Statistics (ONS): a survey of employers called ASHE (the annual survey of hours and earnings), a survey of households (the Labour Force Survey) and the panel dataset of the New Earnings Survey, which provides information from 1975 to 2006.

Most people think that equal pay sounds fine, but assume that the issue at stake is the rate of pay for the same kind of work. But as the ONS said in its monthly Economic & Labour Market Review, published last year just before the Government committed itself to forcing the Equality Bill through, the gender pay gap 'does not necessarily indicate differences in rates of pay for comparable jobs'.

According to ASHE, in 2007 a gender pay gap does not open up until women reach about 30 years of age. From ages 18-29 there is hardly any difference and, according to the Labour Force Survey (LFS), women aged 22-29 are paid on average slightly more per hour than men. As the ONS concludes, having children is the decisive factor, not being a woman. Historical data confirm this conclusion. Based on the New Earnings Survey panel data, in 1975 there was a pay gap from the age of 18 onwards, but in 2006 no such gap existed until age 34. Why? In 1975 women tended to have children in their 20s and by 2006 it was more common to have them in their 30s. As the average age of child-rearing increased so too did the age at which the pay gap kicked in.

Then there are some other disparities, which are very hard to explain as the result of discrimination. Overall the hourly rate of pay is higher for men, but not when they work from 10-20 hours per week or from 20-30 hours per week, when on average women earn slightly more. If discrimination is the explanation, why would (male) employers discriminate against women who work more than 30 hours a week but not those who work fewer hours? Moreover, women who work part-time earn more than men in companies with 500 or more employees but less than men in companies with fewer then 25 employees. What must be going on in the minds of the discriminators?

The truth is that the vital difference is not between men and women but between women with dependent children and everyone else, whether male or female. The hourly rate of pay for women who are neither married nor cohabiting is slightly higher than for men in the same situation. For men and women who are married or cohabiting the hourly pay gap is 14.5% and the gap widens with the number of children. Women with one dependent child earn on average 12.3% less than men and with four or more dependent children 35.5% less.

Quite simply the Government's emphasis on the gender pay gap of 22.6% is an abuse of official statistics. And to infer that the difference in the average hourly rate is the result of discrimination is an abuse of logic. When women without dependent children compete head to head with men in the same situation their hourly rate is higher. Most women today work throughout their 20s and find that success is the result of being good at something. Employers are looking for capable people whether male or female.

Women today don't need government quotas. They are doing fine on their own. They want to be judged on their merits, not patronised by the old generation of 1970s quota feminists like Harriet Harman.